By 2034, India is expected to be among the top five air domestic travel markets globally, in terms of additional passengers per year, according to the International Air Transport Association (IATA).
The civil aviation industry in India has witnessed a new era of expansion driven by factors such as low-cost carriers (LCC), modern airports, foreign direct investments (FDI) in domestic airlines, cutting edge information technology (IT) interventions and a growing emphasis on regional connectivity. Simply going by the market size, the Indian civil aviation industry is amongst the top 10 in the world with a size of around US$ 16 billion.
"The world is focused on Indian aviation - from manufacturers, tourism boards, airlines, global businesses to individual travelers, shippers and businessmen... If we can find common purpose among all stakeholders in Indian aviation, a bright future is at hand," as per Mr Tony Tyler, Director General and CEO of International Air Transport Association (IATA).
Domestic air passenger traffic in India has posted double-digit growth which is a growth of about 16.3 percent in October 2014, according to data released by International Air Transport Association (IATA).
Domestic airlines flew 5.92 million passengers in October 2014 as compared to 5.01million passengers during the same period in 2013. The number of passengers carried by domestic airlines during the January-October 2014 period was 55.06 million as against 50.7 million in the year-ago period, according to data released by Directorate General of Civil Aviation (DGCA).
Aircraft movements, passengers and freight at all Indian airports are expected to grow at a rate of 4.2 per cent, 5.3 per cent and 5 per cent, respectively, for the next five years, according to estimates by Airports Authority of India (AAI).
FDI inflows in air transport (including air freight) during April 2000 to November 2014 stood at US$ 542.55 million, as per data released by Department of Industrial Policy and Promotion (DIPP).
Following are some of the major investments and developments in the Indian aviation sector:
Government agencies have projected that around 500 airports in all, both brownfield and greenfield, would be required by 2020. The private sector is sought to be involved in a big way through different PPP models, with substantial involvement of state support in terms of financing, concessional land allotment, tax holidays and other incentives.
Some of the major initiatives taken by the government are as follows:
India’s domestic and international passengers, as well as its number of aircrafts, are expected to grow significantly in the coming years. This projected growth, combined with India’s low air traffic density—72 compared to 282 in China and 2,896 in the USA—indicates untapped potential given the projected burgeoning young population and rising disposable income levels.
It is of paramount importance for the industry stakeholders to engage and collaborate with the policy makers to come up with efficient and rational decisions that will shape the future of Indian civil aviation industry. With the right policies and focus on quality, cost and passenger interest, India would be well-placed to become one of the largest aviation markets by 2030.
Exchange Rate Used: INR 1 = US$ US$ 0.0162 as on January 21, 2015
References:Media Reports, Press Releases, Press Information Bureau, Directorate General of Civil Aviation (DGCA)